Can’t keep a Goodman down

Saturday, January 19, 2013

By Kyran Fitzgerald

From the top of the agri-business tree in the 1980s, through to the turbulent 90s and his subsequent resurgence in the beef industry, Larry Goodman will face the latest meat crisis in his usual fashion — head on, writes Kyran Fitzgerald

If there is a man in Irish business who can truthfully say he treats triumph and disaster as imposters just the same, it is Larry Goodman.

To his critics, Goodman is a tough operator, a fixer. The Beef Tribunal was established to investigate the beef processing sector and by extension, the activities of Goodman Group.

The Competition Authority has investigated the beef sector, without managing to lay a glove on him.

Farmer suppliers view him as ruthless, yet respect him for the fact that his companies pay, and do so, on time.

Trust built up with suppliers and customers has helped drive his fiercely private ABP Group to an annual turnover of €2.2bn at the last count.

Goodman is famously rigorous when it comes to cost control at his plants, yet he has been known to fund the repatriation of the bodies of overseas-born employees or family members to their home countries.

His top managers are extremely well paid and respected and expected to work all the hours.

By the late 1980s, Goodman walked tall as Ireland’s leading agri-business emperor, sitting side by side with the then taoiseach, Charles Haughey, as the government unveiled a major expansion plan for the beef sector.

Goodman had expanded by slaughtering large volumes of cattle which were then sold into international markets outside Europe, primarily the Middle East and Russia, with the aid of EU export refunds. Irish ministers joined in the effort to open up new markets, travelling to countries such as Libya on behalf of the processors.

In the summer of 1990, however, Goodman’s empire found itself hugely overstretched following the Iraqi invasion of Kuwait.

Goodman had extended hundreds of millions of pounds in credit to the Iraqi government which now defaulted on the debt.

The banks pulled the plug. The Dáil was recalled from its holidays to allow the passage of special legislation providing protection to the Goodman empire.

Given its importance to the economy, it was felt that the group could not be allowed to collapse.

The first examiner in Ireland, Peter Fitzpatrick, was appointed to run the Goodman empire.

By 1995, Goodman reassumed control with the help of private backers such as the McCann family.

By 1999, Goodman had paid off the backers and assumed full control.

But the Louth man faced another big hurdle. In May 1991, ITV’s World in Action broadcast a major investigation into Europe’s “Mr Meat”. It made allegations of abuse of the subsidy system, use of political influence and tax abuse.

It was alleged that weights were falsified and poor quality meat added at the plant in Waterford operated by ABP. It was also claimed ABP had failed to comply with the contractual requirements of Middle Eastern customers with regard to the slaughter of beef.

Soon after, the establishment of the Beef Tribunal was announced, chaired by the president of the High Court, Liam Hamilton — later Chief Justice. The tribunal was the forerunner of the Flood-Mahon, and Moriarty Tribunals.

Its findings, published in 1994, were more ambiguous than many would have hoped. The response triggered a series of events that would bring down the FF-Labour administration headed by Albert Reynolds.

The tribunal concluded that widespread tax evasion was practiced in all plants investigated with the knowledge of management in the Goodman group.

But it concluded: “While the tribunal has established many irregularities and mal-practices... it has not established that they were carried out in all plants with the knowledge of Larry Goodman and the management of the group.”

Goodman was left still standing and in a position to stage a remarkable business recovery, with considerable support from the wider business community.

Goodman today operates in a different yet equally challenging environment.

In 2011, ABP was rebranded as ABP Food Group. In Ireland, it operates six beef-processing facilities, accounting for around a quarter of the national kill. The group has expanded into convenience foods and renewables.

The Daily Mail has been quick to run “Dirty Larry” headlines, fixing the blame for the ingredients scandal on Goodman while carefully avoiding any criticism of Tesco, a major advertiser, and the other major multiples, many of which have opted to squeeze suppliers to the bone in support of its cheap food policy.

Ultimately, the UK food consumer may have to face up to the consequences of a preference for food at any price — like a 20p burger.

A key concern would be a major widening in the investigation on the part of the UK food safety authorities, with ABP being lined up as some sort of fall guy.

It would certainly be a shame if Irish jobs were sacrificed in pursuit of an investigation of the obvious.

ABP has built up a slick marketing operation which trades heavily on Ireland’s green image. It is important that this image should be backed up in reality.

Over the past 18 months beef prices paid to farmers have risen by as much as 30%, fuelled by global shortages.

At the same time, Goodman has been flexing his muscles in the property market, with the acquisition of the former HQ of Bank of Ireland through his property company, Parma Investments.

Goodman’s property interests are extensive. It is not clear how badly, if at all, he has been affected by the crash, but he is clearly still in the game, operating in tandem with son, Laurence. He is the owner of a 700-acre estate in Ravensdale and has his own Lear jet and pilot.

At the age of 15, Goodman was reportedly forced to kneel in apology in front of classmates following an episode of truancy.

It will take a lot more than that to bring Goodman to his knees on this occasion.